REGULAR MEETING OF THE BOARD OF MANAGERS. Tuesday, June 28, 2005 Board Room University Center for Community Health 701 S. Zarzamora.
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1 REGULAR MEETING OF THE BOARD OF MANAGERS Board Room University Center for Community Health 701 S. Zarzamora Minutes BOARD MEMBERS PRESENT: Robert Jimenez, M.D., Chair Robert Engberg Mary Beth Williamson Luis Roberto Vera, Jr., J.D. Alexander E. Briseño BOARD MEMBERS ABSENT: James R. Adams, Vice Chair Ira Smith, Jr. OTHERS PRESENT: George B. Hernandez, Jr., President/Chief Executive Officer, University Health Francisco Cigarroa, M.D., President, UTHSCSA Linda Boyer-Owens, Vice President, People & Organizational Development, University Health Francine Crockett, Executive Director, Purchased Resources Theresa DeLaHaya, Vice President, Prevention Services/University Center for Community Health Peggy Deming, Executive Vice President/Chief Financial Officer, University Health Steve Enders, Senior Vice President, Ambulatory Services, University Health Roe Garrett, Vice President/Controller, University Health David Hnatow, M.D., Medical Director, Emergency Center and resident of the Medical/Dental Staff, University Health ; and Associate Professor/Clinical Surgery, UTHSCSA Michelle Ingram, Administrative Director, Quality and Cost Improvement, University Health Carlos Jaen, M.D., Professor & Chairman, Department of Family Medicine, UTHSCSA Tony LoBasso, Vice President, Affiliate Fiscal Administration, University Health Charles Kight, President/Chief Executive Officer, Community First Health Plans, Inc. Tom Mayes, M.D., Interim Dean, Office of the Medical Dean, UTHSCS Karen McMurry, Executive Director, Legal Services & Risk Management, University Health Thomas Peters, Vice President, Security & Support Operations, University Health Nancy Ray, R.N., M.A., Chief Nursing Officer/Associate Administrator, University Hospital
2 Page 2 of 9 Richard Rodriguez, Vice President/Assistant Administrator, University Hospital Greg Rufe, Administrator, University Hospital Theresa Scepanski, Senior Executive Director, Health Administration, University Health John Sparks, M.D., Medical Director, Detention Health Care Services Juanita Simmons, Executive Director, CareLink Financial Assistance Program, University Health And other attendees. MEMBERS OF THE PRESS: CALL TO ORDER: Dr. Jimenez called the meeting to order at 6:15 p.m. INVOCATION AND PLEDGE OF ALLEGIANCE: Mr. Barber led the invocation and Dr. Jimenez led the pledge of allegiance APPROVAL OF MINUTES OF PREVIOUS MEETING: FOLLOW-UP: The minutes of the regular Board meeting of May 24, 2005 were presented for approval. Dr. Jimenez recommended approval of the minutes as submitted. A MOTION for approval of the minutes was made by Mrs. Williamson and SECONDED by Mr. Briseño. REPORT FROM THE PRESIDENT OF THE HEALTH SCIENCE CENTER FRANCISCO CIGARROA, M.D. Dr. Mayes introduced the physician leaders present and reported a successful resident physician orientation week. The new search committee for the director of the San Antonio Cancer Institute has been established and will be chaired by Dr. Brian Herman, with Dr. Gary McWilliams representing the University Health. Dr. Mayes was asked to elaborate on the neurosurgery residency program news conference that would be held on Thursday, June 30, He announced that the Neurosurgical Sciences Residency Program had been reestablished and received ACGME accreditation effective July 1, The Board of Managers thanked Dr. David Jimenez for his hard work in this achievement and Dr. Jimenez thanked the Board of Managers, as well as Greg Rufe, for the continued support.
3 Page 3 of 9 FOLLOW-UP: NEW BUSINESS A. CONSIDERATION OF APPROVAL OF RECOMMENDATIONS AND ACCEPTANCE OF REPORTS IDENTIFIED AS CONSENT AGENDA ITEMS: Four (4) action items were presented for approval on the consent agenda: 1. Report from the President of the Medical-Dental Staff David Hnatow for Joe Naples, M.D. a. Consideration of Medical-Dental Staff Recommendations Regarding Staff Membership b. Consideration of Recommendation from the Nominating Committee for the Appointment of New Officers of the Medical/Dental Staff c. Consideration of Recommendations from the Bylaws Committee 2. Consideration of Re-Appointment of Yolanda S. Cantu and George Hernandez to The Center for Health Services Board of Trustees Jim Adams 3. Consideration of Purchasing Activities Francine Crockett 4. Consideration of Selected Policies Peggy Deming a. Funding of Financial Reserve for Capital Expenditures, Policy No b. Reserve Policy, No Uses of Tobacco Settlement Funds, Policy No c. Uses of Tobacco Settlement Funds, Policy No Four (4) informational items were presented: 5. Report on 79th Legislative Agenda Erik Dahler/Chris Yanas 6. Update on AirLife Aircraft Acquisition Tony LoBasso/Richard Rodriguez 7. Update on Construction of the Peveto Center for Pastoral Care Greg Rufe
4 Page 4 of 9 8. Update on the Purchase of Building at 6224 IH 10 West Greg Rufe FOLLOW-UP: Staff recommended approval of the action items on the consent agenda. A MOTION for approval of the action items on the consent agenda was made by Mr. Briseño and SECONDED by Mr. Engberg. Mr. Briseño asked to be provided with clean copies of the financial policies (without redlines or strikeouts) as soon as possible. A graph rebalancing the existing balance sheet funds for reserves (previously provided to the Strategic Financial Planning Committee) will be attached to the minutes for clarification purposes. ITEMS RELATED TO PLANNING & OPERATIONS -Mary Beth Williamson, Chair 1. ANNUAL CARELINK PROGRAM REPORT JUANITA SIMMONS CareLink, the Health s medical and hospital care program for needy and indigent residents of Bexar County marked its eighth anniversary this past April. Ms. Simmons report covered the significant indicators regarding the CareLink program for 2004, including demographics (76% of membership are Hispanic, with approximately 30,000 members, or 56% averaging 44.1 years of age). She reviewed the program s budget (hospital expense at $61 million, administrative overhead at $3 million, physician expense at $30.4 million, ancillary expense at $3.6 million, and pharmacy expense at $6.3 million). Enrollment was reviewed at 645,714 member months or an average of 53,810 members per month. This decrease is in part related to limiting new membership to those individuals without Medicare, Medicaid or any other funding source. Low income Medicare members continue to be directed to supplemental Medicare programs such as Qualified Medicare Beneficiary to assist with their Part B premiums, co-insurance and deductibles. The primary zip codes for CareLink members continues to be (7.7%) followed by (5.9%). Ms. Simmons reviewed financial obligations at various federal poverty levels (75%, 100%, 150% and 200%), and compared cash collections for the periods 2000 through CareLink outpatient activity and pharmacy statistics were also reviewed, with a total number of outpatient visits at 239,351. The total number of new medications added to the UHS formulary during 2004 was 32, with a medication assistance program savings of $15,332,054. The program s principle is to make evidenced-based health care decisions using the Health s existing resources available in the form of the InterQual clinical decision support, health risk reduction & education, and disease management programs. The metrics used by CareLink staff include member access times, referrals to other funding sources, collection rate by the
5 Page 5 of 9 FOLLOW UP: CareLink group, authorizations, and volume of filled prescriptions. The average wait time for new patients to access a primary care provider is one week, and 6 weeks for a specialist. The accomplishments for 2004 are listed as the Medicare Drug Discount Care (3000 enrollees), implementation of the disease management program, enrollment audits by pharmaceutical companies and Medicare, technology, ACH participants (3,800) and the exceeding of cash collections goals (target was $10 million, actual was $11.1 million). Goals for the period 2005 and 2006 include Medicare Part D Implementation, member satisfaction, member retention, and provider satisfaction. This report was provided for informational purposes only. No action was required by the Board of Managers. 2. CONSIDERATION OF LETTER OF INTENT AND TERM SHEET FOR FUTURE PLANNING WITH SAN ANTONIO COLLEGE AT THE UNIVERSITY HEALTH CENTER DOWNTOWN STEVE ENDERS/GEORGE HERNANDEZ Mr. Enders presented a letter of intent and draft term sheet needed to formalize planning of the University Health Center Downtown with the Alamo Community College District (ACCD). The ACCD requested development of such a document so they can demonstrate to the ACCD Board a commitment to a facility planning process that includes the requirements of the nursing and allied health training programs of San Antonio College (SAC). To date, preliminary facility plans for UHCD have been developed and shared with both Board Committees. Plans related to University Hospital facility needs and facilities connected to the planned UTHSC Medical Arts & Research Center (MARC) will be discussed in the near future. While it will be a challenge to develop the overall capital facilities plan on a timeframe that fits with the needs of both the UTHSC and the ACCD, there are apparent benefits of doing so. Staff recommended concurrence by the Board of Managers with the proposed letter of intent as a first step to see if the UHCD component of the facilities plan can be developed in a fashion which meets the vision of both the Health and the ACCD. A MOTION authorizing the President/CEO to sign the proposed letter of intent addressed to Dr. Federico Zaragoza, Vice Chancellor at ACCD, was made by Mr. Engberg, SECONDED
6 Page 6 of 9 by Mr. Briseño, and PASSED UNANIMOUSLY. FOLLOW UP: None ITEMS RELATED TO BUDGET & FINANCE ROBERT ENGBERG, CHAIR 1. CONSIDERATION OF SELECTED PURCHASING ACTIONS RECOMMENDED BY THE STRATEGIC FINANCIAL PLANNING COMMITTEE GEORGE HERNANDEZ A. Contract for Capital Equipment - Construction of Purchasing an ENT Image Guided Greg Rufe FOLLOW UP: Staff requested approval to award a purchase contract for an ENT image guided system for a total cost of $144,000 to GE Healthcare OEC, Inc. A MOTION to award the purchase contract to GE Healthcare, OEC, Inc., for $144,500 was made by Mr. Briseño, SECONDED by Mrs. Williamson, and PASSED UNANIMOUSLY. 2. PLAN ADMINISTRATOR S REPORT PART I - UNIVERSITY HEALTH SYSTEM PENSION AND RETIREMENT BENEFITS GEORGE HERNANDEZ/LINDA BOYER-OWENS In 2004 an Annual Pension Plan Administrator Report on Plan benefits (liabilities) was recommended to compliment the Pension Trustees report to the Board of Managers on the status of the Plan Trust (assets). The accepted Plan Administrator s Report would form the basis for an annual report to Plan Participants and be distributed with Annual Statements. This report is the first such report to the Board of Managers, to be presented in two parts over the course of June and July. Part I will provide a view of the UHS Pension and retirement benefits. Part II, to be presented in July, will provide a view of pension plan sustainability, funding and management. Ms. Boyer-Owens reviewed composition of the UHS retirement package and the five important elements of a UHS retirement. She described those elements as follows: 1) Pension Plan a defined benefit, formula driven, certain value. Employee must contribute 2% while UHS contributes 4 4.5%; 2) 457 Retirement Savings Plan a defined contribution, investment
7 Page 7 of 9 driven value, voluntary with a deferral limit at $14, percent of employees are contributing 4.5% of covered payroll; 3) Employer 457 Match Plan Match equals 25% of the first 4% of pay contributed by employee; 4) Social Security Employee & UHS each contribute 7.65% of pay, and 5) Retiree Medical Insurance at active employee rates. UHS contributes $1231/year. She provided a graphics presentation using a sample median UHS retirement package based on a final pay of $27,000, at retirement age 62 with 23 years of service. The annual value of the retirement package is $26,550 or 98.3% of final pay if the employee has put 3% of pay per year in a 457 account: 1) Pension Plan - $9,315 (32%); 2) 457 Plan $3,885 (22%); 3) Employer Match - $810 (3%); 4) Social Security $11,340 (39%); 5) Retiree Medical Insurance - $1,200 (4%). She reviewed the pension formula as being 1.5% of final average pay times years of participation service; years of service at hours over 12 months; and final average pay as the highest 5 years of the last 10. Pension eligibility includes a 5 year cliff vesting, normal retirement age at 65, and early retirement as early as age 55 plus 5 years of service, and pensions initiated at age 55 reduced by 50%. The Rule of 85 is a pension plan provision that allows a full pension before age 65 when age and years of participation equal 85. Ms. Boyer-Owens also reviewed the number of vested and nonvested active participants, participant demographics, retirees receiving benefits, and deferred vested participants, and provided a 2004 contribution and analysis comparing the employee pension plan, the M.D. pension plan, the individual 457 accounts, the 457 match savings plan, and retiree medical expenses. She provided a graph annotating UHS retirement income by salary level for employees retiring at age 62 with 23 years of service and a history of contributing 5% of pay to a 457 retirement account. Another graph depicted 457 participants by income, and contributions by income. Regarding benefit competiveness, Ms. Boyer-Owens cited a Watson Wyat Data Services (a consulting firm specializing in Human Capital Management) report which states that the average target Pay Replacement Rate for Normal Retirement under a defined benefit plans offered by healthcare employees (at age 65) with 25 years of services) is 35.2% or 60.3% including social security. The Health system plan compares quite favorable to this metric, replacing 37.5% of final average pay. In closing, Ms. Boyer-Owens reported that the Pension Plan enhancement most frequently requested by employees is a provision to allow retirees less than 65 years of age to draw a
8 Page 8 of 9 pension while working part-time. Current regulations prohibit reemployment of a pension-drawing UHS retiree in any capacity before age 65. Pending Federal legislation supporting Phased Retirement may allow the Health an opportunity to respond to this request. Also pending is an analysis of options available to the Health to offset the impact of Internal Revenue Compensation and Benefit Limits on highly compensated staff participating in the UHS Pension Plan. The range of possible remedies was severely reduced this year by new Internal Revenue provisions (Code 409(a)) that restrict pre-tax treatment of compensation deferred for this purpose. This report was provided for informational purposes only. No action was required by the Board of Managers. Mr. Briseño noted a low participation rate in the 457 plan by those employees at the lower end of the earning scale (one out of five). Board members urged staff to creatively contemplate possible solutions to help increase participation in the 457 plan among this group of employees. FOLLOW-UP: Ms. Boyer-Owens will revise her presentation slides (457 Plan Participation Rate by Pay Group and Average Contribution by Pay Group) to depict a more typical scenario among those employees at the lower end of the earning scale, and staff will continue to explore possibilities, and/or incentives, to increase participation among this group of employees 3. CONSIDERATION OF FINANCIAL/OPERATIONS REPORTS FOR MAY 2005 PEGGY DEMING The Health experienced a $1.3 million gain from operations for the month exceeding budget by $1.8 million. This resulted from positive performance from CFHP, higher net patient revenue, higher DSH/UPL expected based on the latest estimates provided, and positive variances in all expense categories except supplies. Investment income was up given a higher invested balance. An unrealized market gain continued to be reflected. After considering the unrealized market gain, the Health reflected a bottom line of $2.7 million which exceeded budget by $2.5 million. CFHP reflected a bottom line of $802,000 which exceeded budget by $741,000. Ms. Deming recommended acceptance of the financial reports subject to audit. A MOTION for approval of this recommendation was made by Mr. Briseño, SECONDED by Mrs. Williamson, and PASSED UNANIMOUSLY. FOLLOW-UP:
9 Page 9 of 9 COMMUNICATIONS Mr. Hernandez thanked Board members for attending today s session of the Bexar County Commissioners' Court for a brief 50th anniversary celebration. The University Health was presented with two Proclamations in recognition of the formation of the Bexar County Hospital District in 1955, and its achievement as a Solucient Performance Improvement Leader. There will be a formal 50 th birthday celebration for staff and the public on Wednesday, June 29, 2005, at the University Health Center Downtown at 2 p.m. Mr. Briseño informed the Board of Managers that Mr. Hernandez had been honored by the Hispanic Chamber of Commerce at a welcome breakfast on June 8, EXECUTIVE SESSION: Dr. Jimenez recessed the public meeting at 7:50 p.m. The Board of Managers met in closed session to evaluate the quality of medical and/or health care services as permitted by Section of the Texas Health & Safety Code. The public meeting reconvened at 8:20 p.m. ADJOURNMENT: There being no further business, Dr. Jimenez adjourned the meeting at 8:21 p.m. Robert L. Jimenez, M.D., F.A.P.A. Chairman, Board of Managers Ira Smith Secretary, Board of Managers Sandra D. Garcia Recording Secretary
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